Electric vehicles - why we need them

Australia does export some oil, mostly heavy or high sulphur content oil which our refineries can not handle. Remaining domestic production meets about 70 per cent of our needs and the shortfall is imported. Moreover, our dependence on oil imports will steadily grow as the economy expands, the number of vehicles grows and the frequency with which they are used increases.

We have no control over the price we pay for oil, whether it is produced in Australia or imported. That price is influenced by the Organization of the Petroleum Exporting Countries (OPEC) and determined by the international oil market which, in our region, means the price paid for oil in Singapore.

Australia is hostage to the vagaries of a skittish global oil market and the decisions of OPEC members because it has to compete on the world market for a finite commodity. In doing so, it spends billions of dollars on oil imports.

This contributes to a growing trade deficit - the difference between the value of its imports and exports. For years, this deficit has been increasing despite growing revenue from other mineral exports and as the volume of oil we produce begins to decline.

It is clearly not in the national interest to perpetuate this dependence for longer than is absolutely necessary. We can and should take action to break our dependence on oil as the source of vehicle fuels by producing and designing vehicles which can be operated by alternative fuels. There are only two possibilities: bio-fuels and electricity.

Bio-fuels are really a non-starter because their production is dependent on use of food crops such as sugar, and grain in the case of ethanol, and oil yielding crops in the case of bio-diesel. The quantity of crops required to even partially replace fossil fuels would inflate prices. The inflationary effects would be pervasive throughout the food sector, make our exports less competitive and, with a growing population, cause a scarcity of domestic food.

Cheap and plentiful bio-fuels might be produced using genetically engineered algae or other organisms. This is certainly a possibility in the future; but would fuels produced in this way be more cost-efficient than electricity? This is unknown at present but seems unlikely since clean electricity can be generated from geothermal heat relatively cheaply.

Consumers will always opt for the cheapest fuel available. That is likely to be electricity produced from renewable sources and Australia is one of the best endowed countries for producing it.

Production of fossil-fuelled vehicles in Australia should have a very limited future, certainly not extending beyond 2015. Over the next three to five years Australian vehicle builders must re-tool for production of electric vehicles and kits needed to retrofit existing non-electric vehicles. Government should now initiate a break with our fossil-fuelled past and our dependence on increasingly expensive oil.

The result will be to strengthen the domestic economy and increase our competitive advantage in production of goods for domestic consumption and export. We know what the future holds for us if we do not act.

We must take advantage of the current difficulties faced by Australian vehicle producers - which are in part of their own making. Government can and should insist that, as a condition of grant funding, the industry re-tool for production of electric vehicles.

Cost of pollution